Trent Guinn

Trent Guinn
Contributor since: 2012
And they want Ward out...LOL
Yes. So when prices recover, they are allowed to add this back to the books. Really, a non-event for long term investors. Well, I suppose it provides a nice dip to buy on.
Are you asking why the price difference is greater than the BTU difference between oil and gas? Because, due to shipping difficulties, oil is a very global commodity, where nat. gas is very local--and we have a glut in the US. In Europe, Japan, etc. the price of natural gas is much closer to the BTU/historical equivalent.
Reuters is reputable, but it also seems they have some sort of grudge against CHK. Every bad news report released this year came first from Reuters. Not trying to start any conspiracies or arguments, just stating an opinion.
If you are worried about a company "completely falling apart," why are you invested in it at all?
You can not compare using the split-adjusted price for one value and then use the non-adjusted price for the other...Either it's 500-20 or 50-2, take your pick.
I was not aware that the Mississippi lime went all the way to Nebraska. My knowledge of it was that it only was in the north-western Oklahoma region and the very south-western Kansas region. Is this acreage in Nebraska any good?
Tom has leased 1.2 million acres in the Mississippian LIME, and they only want/can drill 1 million. Having paying an average price of $200/ac for more acreage than you can drill, and recent prices of over $4000/ac, it seems pretty obvious why he isn't leasing any more. SD buys what is out of favor, and then unlocks the true potential of the plays. Mississippian acreage is not currently out of favor.
HOWEVER, offshore is out of favor, and Ward picked up Dynamic on the cheap. "Likely to do anything,"-The only thing I see Tom Ward likely to do is to be a cheap-oil buyer, unlocking huge value for investors who are willing to "speculate."
You repeatedly say that "SD will need to drill deeper" because other companies are in the area. Why? SD has 1.2 MM acres in the Mississippi lime- they have plenty of drilling locations for years to come just in that formation.
These companies operate in completely different sectors of the O&G industry, can't compare the two.
It's currently priced above these growth rates. Still like it, but not at these values.
Thanks for the article, Michael. I am very frustrated by SSN. They haven't yet, but I feel confident that SSN will soon figure out how to produce these wells. They have a strong cash position that will allow them to mess up a few more times also.
Once they figure it out, good things should happen. If they don't, maybe they will just be bought out.
I'm almost certain the Founder's Well Program is 'all or nothing.'
LOL. It seems as if the traders are taunting him.
Obama says: "I will end speculators who are driving the price of oil up!"
Market says: "Crude +1.4%"
Dana, I like your point about how CHK will have reduced earnings potential once the prices rebound. However, they will still have plenty of acreage.
You're right, the co's that are not selling their assets will be well positioned for the turnaround. But, I may like your own counter-argument the best: if they are able to survive without selling assets.
I think you know my take on CHK; and I appreciate the well-written opposing viewpoint.
While I agree it is dangerous, it is hardly a bluff. They actually went naked.
I can only see this going one of two ways: 1. An absolute home run, or 2. A huge strike out.
I have a feeling that with the downside to NG limited(below most operators cost to produce), the odds may be that this is a home run.
I assume that the cost to hedge at $4-6/MCF when prices are hovering around $2/mcf is quite high. Not many people are willing to make that deal right now. Kind of like buying puts. If you ink the hedges when prices are closer to the hedge price they are probably a lot cheaper, and more expensive when the prices are further away from the hedge price. Therefore, if they just took these hedges off, I assume they made a bit of money off of them.
I am not an expert on this, so I would appreciate if someone would correct me if I am wrong.
CHK just announced the removal of their natural gas hedges. This could signal that CHK believes this is the bottom of NG prices. Without these hedges, they will save money and leave room to the upside.
Mr. Tradestar,
It seems to me as if YOU have the raw nerve. It seems to me as if you have a personal vendetta against CHK for some reason, or you are trying to place blame for the losing trade you made. To try to blame it on "hype" articles, however, is foolish. Seeking Alpha has many different viewpoints, and it is up to the reader to decide which route they want to take. That is the beauty of this website. But these articles are just that, VIEWPOINTS.
I am done responding to you, and I hope that some other author can make you back all the money McClendon and I lost you. Happy trading.
Reserve replacement; i.e. lease more acreage.
Actually, after checking out your profile, I see that you call anyone recommending a stock a pumper. If you want I can start writing articles about how Apple is going to $1000 and you should dump a cool million into those shares.
I'm going to respond to both this response and the one below it. It will be lengthy, so please bear with me.
"It smells foul to me." Are you accusing me of market manipulation? I guess I will take that as a compliment, because if I can get less than 30k viewers and ~30 followers to make ANY significant impact on the share price, I suppose my articles and opinions are very convincing. Also, I don't have the money to own nearly enough shares to make any sort of significant money. LOL.
As to you losing so much money; don't blame the CEO and his ways AFTER you bought !!55,000!! shares. Maybe you shouldn't put over a million dollars into a stock that you can't do enough research on to discover that the CEO that has been in place since DAY 1 does things the way he does.
If you really did have so many shares and lost so much money, it sounds like you deserved it. If not, I would appreciate it if you would stop recklessly bashing stocks and accusing the SA Authors of market manipulation.
I am not sure but that is worth looking into. However, you are not limited to investing in just one company. CHK will have a very strong presence in the CNG market, as well as still being a top oil and gas producer.
Picture it as a "major oil(Shell, Chevron, BP, etc.)" company, being both on the "refining" and production side of things.
Thanks for the insight, Okgenie!
Good question, Harry.
The Total deal was inked when NG was around $3, and I believe you are grossly overstating the cost of acquisition. I can't find the $/mcf on their recent filing, but the $/mcfe CHK has listed is just north of $3.
In conclusion, I don't think they are worth much less.
Slimback,
Anything is worth as much as someone will pay. In this case, people(the CHK JVs) have paid a whole heck of a lot for the acreage.
Thanks for the comment, Skip. I agree it is risky, but I believe CHK management can pull it off.
Hgtorres, thanks for the comment.
With a bet on CHK you are receiving the upside potential from both the NGV and NG prices. The only producer in the US with more gas production is XOM. If you want to invest in them for a rebound in nat gas be my guest, but good luck seeing the impact in such a behemoth.
As for getting my facts straight, I believe I have them straight so far. Would you mind pointing out which ones in particular you are concerned about?
TMK, thanks for the comment.
I agree, that is why I stated that investors should be aware of the upcoming seasonal drop in nat gas prices this summer.
CHK is setting aside 1-2% of their drilling Capex for this.